Central North Island Farm Supplies Investment

The land and building housing one of the country’s biggest goods suppliers to the primary produce sector – and located just a few hundred metres from the main arterial route of State Highway 1 – has been placed on the market for sale.

The 4,104-square metre site is located in Tokoroa’s industrial quarter, and has a substantial street frontage onto Chambers Street, with staff and customer parking for more than 20 vehicles, along with room for future expansion.

The address is exclusively tenanted by farm supplies retailer Farm Source – the subsidiary retail trading arm of Fonterra Co-Operative Group Limited, which is New Zealand's largest company and the world’s largest dairy exporter.

The Farm Source retailing brand has set itself apart from competitors in the dairy farm supplies sector through a range of customer-focussed innovations – such as the inclusion of features ranging from drop-in lounges with complementary coffee, through to business amenities consisting of meeting and seminar rooms, and user-free high-speed Wi-Fi.

Most Fonterra customers are shareholders in the Farm Source cooperative entity – providing a loyal clientele to all Farm Source stores, including the strategic Tokoroa location. The aim is to cement Farm Source branches as a ‘one stop’ farm services retailers - selling animal feed, shed supplies, hardware, fencing, clothing, animal husbandry and stock management equipment, agri’ chemicals, machinery, fertiliser, livestock, and nutritional supplements.

Overall, the Tokoroa site’s well-maintained 640-square metre premises encompass a large portion of retail space, with an adjoining high-stud warehouse space, and ample space for offices and staff amenities – all surrounded by a sealed and fully enclosed yard with easy vehicle flow for efficient collection of products.

The freehold land and building located at 85 Chambers Street in Tokoroa are now being marketed for sale at auction on May 21 through Bayleys Hamilton. Salesperson Josh Smith said the modern steel-framed Farm Source building had an IEP rating of 100 percent, and would appeal to commercial property investors looking for a well-established nationally branded tenant servicing a strong sector of New Zealand’s economy.

“The flat Chambers Street site benefits from a high-profile street corner frontage zoned for commercial use under the South Waikato District Council Plan – with other big-name tenancies in the immediate vicinity including the likes of building suppliers ITM and Mico Plumbing, the Tokoroa depot for passenger transport business Go Bus Transport, and a plethora of local engineering and machinery services warehouses and factories such as Bolster Engineering,” said Smith.

“The Chambers Street industrial precinct location within Tokoroa enables farmer clients to easily access Farm Sources’ retail premises without having to enter the town’s nearby busy and well patronised central business district. The East Coast Main Trunk Line train track connecting Kinleigh and Waharoa sits directly at the rear of the Chambers Street address.

“A large flat undeveloped grassed area immediately adjacent to the current Farm Source building means the site is well future-proofed for any potential expansion of the premises to cater for growth.”

Farm Source is on a current lease at the Tokoroa site running through to 2040, with four further three-year rights of renewal – generating annual rental of $102,701 plus GST and operating expenses. Market rent reviews are scheduled for 2031 and 2037, with separate fixed annual rent increases of 2.5 percent.

With a population of approximately 14,500 residents in Tokoroa, Farm Sources’ branch trading there is regarded by the company as being very strategically located – servicing a customer base which stretches south down towards the Kinleith, Mangakino and Atiamuri districts, and Wiltsdown and Lichfield districts to the north. This greater South Waikato district catchment area renowned for its large-scale dairy farming operations has population of approximately 22,800 people.

Reflecting the productivity of dairy farming in the greater Tokoroa district, Fonterra built what was the southern hemisphere’s largest cheese factory just north of the town in the 1995. Over the ensuing decades, large swathes of previously forested land in the district were converted into dairying units after pine logs were harvested. Located midway between Taupo and Hamilton, Tokoroa is the fourth largest town in the Waikato region.